Investment Returns 2020

Secret2ndAccount

Deleted_User said:

Don’t think a year’s return is a good reason to be either pleased or disappointed. 

I think 2020 was the most fascinating year to watch investments for a long time. We had a precipitous fall, a recovery, and a raging bull market. Most of an economic cycle played out in 12 months. It gave me a good opportunity to look at each of my investments and see how it behaved in a crash, and how it participated in the subsequent growth.

I think there's value in plotting CGT against PNL to see how each did it's intended job of preserving wealth (though maybe VLS20 was the winner here). 

There's also great opportunity for the individual to assess their own reaction, and to consider how to perform better in the next crash, or to allocate their assets so that they will be best able to navigate through it. We often hear people speculate that it's one thing to imagine how you would react to a 25% drop in the value of your portfolio, and quite another when it just happened. Well, for some, it happened in 2020, so let's hope people can at least gain some experience of how to ride these things out.

Thrugelmir

Duggo said:

My isa is up 6%, not exactly brilliant compared to some of you. 

What's your risk profile? There'll always be somewhere better to invest with the benefit of hindsight. Until the gain is crystalised . It's just a number on a screen or piece of paper. Investing is for the long term. Last years laggards may well be the winners in the future. That's why diversification is key. 

MovingForwards

My SIPP is returning 11.97%, ISA 12.14% both as of today's figures.

Duggo

Thrugelmir said:

Duggo said:

My isa is up 6%, not exactly brilliant compared to some of you. 

What's your risk profile? There'll always be somewhere better to invest with the benefit of hindsight. Until the gain is crystalised . It's just a number on a screen or piece of paper. Investing is for the long term. Last years laggards may well be the winners in the future. That's why diversification is key. 

I think my risk profile is 4, it used to be 5, but as we are quite close to taking an income we wanted more security.

Secret2ndAccount

Prism said:

Secret2ndAccount said: These are indices. The indices adjust themselves to account for the value of dividends paid out. So, in effect, yes.

They usually don't include dividends. The FTSE 100 with dividends reinvested was down 11.5% in 2020.

Are you sure? Quoting from the official FTSE/Russell Guide to Calculation Methods for the FTSE UK Index

"The algorithm used by FTSE for this adjustment assumes that on the Ex-Dividend date, the index is adjusted at the start of the day to allow for the amount of dividends due on that date and that the full amount of the dividend is reinvested at the adjusted price level"

Of course, that's not a perfect reflection of what happens in the real world (the stock price doesn't move exactly in lockstep with the dividend payment), but I think they try to tweak the index so that it includes the value of dividends.

Prism

Secret2ndAccount said:

Prism said:

Secret2ndAccount said: These are indices. The indices adjust themselves to account for the value of dividends paid out. So, in effect, yes.

They usually don't include dividends. The FTSE 100 with dividends reinvested was down 11.5% in 2020.

Are you sure? Quoting from the official FTSE/Russell Guide to Calculation Methods for the FTSE UK Index

"The algorithm used by FTSE for this adjustment assumes that on the Ex-Dividend date, the index is adjusted at the start of the day to allow for the amount of dividends due on that date and that the full amount of the dividend is reinvested at the adjusted price level"

Of course, that's not a perfect reflection of what happens in the real world (the stock price doesn't move exactly in lockstep with the dividend payment), but I think they try to tweak the index so that it includes the value of dividends.

It depends where you look. I tend to use Trustnet charts to be sure that you are getting dividends reinvested and can also toggle them off. So we can quickly see that over 2020 the index without dividends returned -14.3% and with the dividends -11.5%.

You can have a play here Chart Tool | Trustnet
The dividend option is under the chart basis button.

Thrugelmir

When comparing indexes there's always exchange rates to be considered as well. Can have an impact on portfolio performance depending on when investments are traded throughout the year as well. 

Thrugelmir

Secret2ndAccount said:

Deleted_User said:

Don’t think a year’s return is a good reason to be either pleased or disappointed. 

I think 2020 was the most fascinating year to watch investments for a long time. We had a precipitous fall, a recovery, and a raging bull market. Most of an economic cycle played out in 12 months.

Dig deeper and the bull market was in a limited number of stocks. Fuelled by millions of new investors. Some with money burning a hole in their pockets speculating rather investing. China may well be the only place to report positive GDP rise in 2020. Making suggestions of an economic cycle somewhat remote. 

MK62

There is a FTSE100TR index which includes dividends (Total Return).....pretty much confirms Prism's figures.

https://uk.investing.com/indices/ftse-100-total-return

There's a TR companion index for many/most of the major indices.....

JoeCrystal

My pensions today went up by 6.2% since the start of the year. The lowest they went to is 16.2% overall down in April from the start of the year. It is okay, I suppose. Since I started contributing to a pension in September 2010, I have seen the XIRR return of 6.36%, which is marginal. 

Frankly, my pension pots' performance is right at the bottom of my worries since I got far more closest worries to consider like potential redundancy and financial commitment this year.